Month: July 2021

Reserve Bank of India – Press Releases

Press Releases

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The following State Governments have offered to sell securities by way of an auction, for an aggregate amount of ₹13,400 Cr. (Face Value).

Sr. No. State/ UT Amount to be raised (₹ Cr) Additional Borrowing (Greenshoe) Option (₹ Cr) Tenure(Yrs) Type of Auction
1 Andhra Pradesh 1000 – 16 Yield
1000 – 17 Yield
2 Assam 500 – 5 Yield
3 Bihar 2000 – 6 Yield
4 Goa 100 – 10 Yield
5 Gujarat 1000 – 9 Yield
6 Maharashtra 1000 500 10 Yield
1000 – 11 Yield
7 Mizoram 100 – 13 Yield
8 Punjab 1200 – Re-issue of 6.95% Punjab SDL 2031 issued on June 30, 2021 Price
9 Rajasthan 1000 – 10 Yield
10 Tamil Nadu 1000 – 10 Yield
1000 – Re-issue of 6.83% Tamil Nadu SDL 2031 issued on June 23, 2021 Price
11 West Bengal 1500 – 7 Yield
  TOTAL 13,400      

The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on July 06, 2021 (Tuesday). The Government Stock up to 10% of the notified amount of the sale of each stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on July 06, 2021 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.00 A.M. and the competitive bids should be submitted between 10.30 A.M. and 11.30 A.M.

In case of technical difficulties, Core Banking Operations Team (email; Phone no: 022-27595666, 022-27595415, 022-27523516) may be contacted.

For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at same/different rates of yield or prices in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield /minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of ₹10,000.00 and multiples of ₹10,000.00 thereafter.

The results of the auction will be announced on July 06, 2021 (Tuesday) and payment by successful bidders will be made during banking hours on July 07, 2021 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. For the new securities, interest will be paid half yearly on January 07 and July 07 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

Ajit Prasad
Director   

Press Release: 2021-2022/469

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Reserve Bank of India – Notifications

Notifications

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April 14, 2015




Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.




With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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Karnataka Gramin Bank records ₹14 crore net profit in 2020-21

Banking & Finance

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The Ballari-headquartered Karnataka Gramin Bank (KGB), sponsored by Canara Bank, registered a net profit of ₹14.04 crore during 2020-21 as against a profit of ₹18.61 crore in 2019-20.

A press statement said that the bank has been consistently earning profits since inception.

The bank registered an income of ₹3,478 crore as against ₹3,233 crore in the previous fiscal.

It said that the bank continues to be the largest regional rural bank (RRB) in southern India with a total business of ₹55,855 crore during 2020-21 and the second largest RRB in the country, it said.

The deposits of the bank stood at ₹31,068 crore, and advances at ₹24,787 crore during the financial year 2020-21.

Also read: 2 RRBs in Karnataka amalgamated

Priority sector advances grew by 15.05 per cent to reach ₹22,928 crore, constituting 92.50 per cent of the bank’s total advances, it said.

The bank is targeting a business of ₹62,000 crore for 2021-22.

Karnataka Gramin Bank has a network of 1,134 branches, and 242 ATMs. It has deployed around 1,300 business correspondents for rendering services to its customers.

During the lockdown period, the bank deployed five mobile ATMs to deliver cash to the doorsteps of the people in Ballari, Kalaburagi, Raichur, Mysuru and Chitradurga districts, the statement said.

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Policy support has contained impairment of banks’ balance sheets: RBI

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The Reserve Bank of India (RBI) said unprecedented policy support has contained the impairment of balance sheets of banks in India despite the dent in economic activity brought on by waves of the pandemic.

In its latest Financial Stability Report, the central bank observed that banks’ performance and balance sheet quality have turned out to be better than anticipated at the beginning of the pandemic in terms of deposit growth, decline in Gross Non-Performing Assets, capital adequacy and improved profitability.

Stress tests indicate a limited impact of macroeconomic and other shocks on the Indian banking sector, it added.

RBI emphasised that banks were largely shielded from the MTM (market-to-market) losses in their portfolios subject to fair valuation, also aided by the G-SAP (Government Securities Acquisition Programme) of the Reserve Bank.

Downside risks

However, the RBI cautioned that downside risks nevertheless remain, with stress signals emanating from the build-up SMA (special mention account) advances.

Banks must prepare contingency strategies to deal with segment-specific asset quality pressures, especially when regulatory reliefs are eventually rolled back.

Subdued credit growth in a low interest rate scenario could impact net interest income levels adversely, the RBI said.

In his foreword to the FSR, the RBI Governor Shaktikanta Das observed that even as India’s financial system remains on the front foot and prepares to intermediate in meeting the resource needs of an economy on the move towards a brighter post-pandemic future, the priority is to maintain and preserve financial stability.

“In a situation in which economic activity has been disrupted by the pandemic, the financial system can take the lead in creating the conditions for the economy to recover and thrive.

“Stronger capital positions, good governance and efficiency in financial intermediation can be the touchstones of this endeavour so that financing needs of productive sectors of the economy are met while the integrity and soundness of banks and financial institutions are secured on an enduring basis,” said the Governor.

While the recovery is under way, Das cautioned that new risks have emerged on the horizon and these include the still nascent and mending state of the upturn, vulnerable as it is to shocks and future waves of the pandemic; international commodity prices and inflationary pressures; global spillovers amid high uncertainty.

The Governor also flagged the rising incidence of data breaches and cyber-attacks.

Accordingly, sustained policy support accompanied by further fortification of capital and liquidity buffers by financial entities remains vital, he added.

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Success of a bad bank initiative will depend upon design aspects: RBI

Banking & Finance

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The Reserve Bank of India (RBI) said the aggregation of assets by the proposed National Asset Reconstruction Company Limited (NARCL) is expected to assist in turning around the assets and eventually offloading them to Alternative Investment Funds (AIFs) and other potential investors for further value unlocking.

Banks are understood to have identified 22 stressed consortium loans (₹500 crore and above) aggregating about ₹89,000 crore for transferring to NARCL, popularly termed as a “bad bank”.

According to RBI’s latest Financial Stability Report, drawing from established market principles and global experience, the success of a bad bank initiative would eventually depend upon design aspects.

The design aspects include fair pricing; complete segregation of risk from selling banks; investment of external capital; independent and professional management of the new entity; minimising moral hazard; and adequate capitalisation of the banks post-sale of assets to invigorate fresh lending.

The Board of Canara Bank had given in-principle approval on June 15, 2021, for participating in the National Asset Reconstruction Company Ltd (NARCL) as a sponsor by taking 12 per cent equity stake.

The Bengaluru-headquartered public sector bank has sought the Reserve Bank of India’s approval for the same.

Banks such as State Bank of India, Bank of Baroda, Bank of India and IDBI Bank are expected to take up to 10 per cent stake in NARCL.

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10 Top Cryptocurrencies Of June 2021 Some Of Which You Can Consider For Investment In July 2021

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Investment

oi-Roshni Agarwal

|

For the month of June, majority of the cryptocurrencies logged losses, but despite the volatility that stood out in this asset class during the month, you may want to know about the cryptocurrency which performed the best or saw the lowest losses. Here’s the complete list of top 3 cryptocurrency assets as sourced from the Coindesk- the blockchain news outlet that has compiled a list of top 20 crypto assets.

10 Top Cryptocurrencies Of June That You Can Consider For Investment In July

10 Top Cryptocurrencies Of June 2021 Some Of Which You Can Consider For Investment In July 2021

1. Bitcoin (BTC):

It may be surprising for some crypto enthusiast and stakeholders but the largest cryptocurrency has stood as the best performing crypto for the period under review i.e. June 2021. Though the market expectations such as imminent Death cross event spooked the crypto to again below $US 30000, it managed to end the June month higher.

2. Algorand (ALGO):

This is an open-sourced, decentralized blockchain capitalizing on two-tiered structure and is aimed at increasing speeds as well as realizing finality. The blockchain network makes use of Proof-of-Stake (PoS) consensus mechanism. For the month of June, ALGO loggest second lowest losses of more than 4 percent as per the Coindesk Research and the crypto last quoted at a price of $0.8451.

3. Filecoin (FIL):

The open-source cryptocurrency and digital payment solutions fell in value by over 14% or close to 15%. The cryptocurrency has been mined aiming to be a digital storage as well as data retrieval method. Developed by Protocol Labs, the Filecoin crypto allows users to rent unused space in the hard drive. As per Coinbase portal, the 24 hour change in the crypto has been down by 8 percent and quotes at $4205.

4. Tezos (XTZ):

As per the official website of the crypto, it is an open source platform for addressing major hurdles confronting blockchain adoption for assets as well as apps. Also the structure of the Tezos crypto is designed in a way to take on long term upgradability, open participation, collaboration as well as smart contract safety.

For the June month, Tezos declined by close to 17.5% and last quoted at a price of $2.92 with a percentage increase of over 5% in the last 24 hours.

5. Ethereum (ETH):

The second most valuable crypto by market capitalisation stood as the fifth top cryptocurrency for June 2021 and lost as much as 17.7% in its price. It is being advocated by experts that Ethereum has the potential to pip Bitcoin and also for some time we had even seen the volume in Ethereum rising above Bitcoin.

6. Cardano (ADA):

The crypto conceived via peer reviewed research which came into existence on the basis of evidence based methodologies is a proof of stake blockchain platform. The crypto integrates pioneering technologies for offering unmatchable security as well as sustainability solutions for decentralized applications, systems, and societies.

as part of the crypto sell off, the crypto also registered a fall of 19.2% from the month trading at $1.7210 beginning June 1. As on July 1, it quotes at a price of $1.34 and is said to be a ‘Buy’ for July month as a bullish breakout is seen for the digital token.

7. Litecoin (LTC):

This crypto can be used by anyone, anywhere without permission for transacting with anyone else globally. As of early June, the crypto is the 14th largest by m-cap. The token primarily makes use of peer to peer technology.

“Due to Litecoin’s complementary nature to Bitcoin and the fact it has established a market for itself, it is often considered the first successful alternative cryptocurrency, or altcoin”, said co-founder of Coinflip.

“If you are interested in investing in a technology that enables fast and inexpensive borderless transactions, Litecoin is a great investment opportunity,” he added. Also, it has been a relatively stable crypto or altcoin when compared to other altcoins at around the same time. “Litecoin is a digital currency that uses peer-to-peer technology to send payments anywhere in the world quickly,” he said further.

The price of Litecoin as at the time of writing this copy is $135.8 and it dived a huge21.6 percent in June month.

However there are varied views around the altcoin and some also see it as a good speculative trade opportunity and not a good investment idea.

8. NuCypher (Nu):

This is a decentralised encryption, key management system (KMS) and access control encryption service for public blockchains. The crypto facilitates end-to-end encrypted data sharing on decentralized storage solutions as well as public blockchains.

The crypto is considered a good investment on the following premise: the crypto has a low circulating supply, a small m-cap and because of its utility. Further it has a strong technological backing and solid use cases.

In June, the crypto dived a good 22%, and it last quoted at a price of $0.2299.

9. Bitcoin Cash (BCH):

Bitcoin Cash aims to be decentralised, peer to peer digital cash. Considering the prospects of Bitcoin Cash, the token in comparison to Bitcoin can be a safe bet and is a better investment considering the average transaction fee is low. Also, BCH can also manage around 25,000 transacions per block. Bitcoin processes 1,000-1,500 transactions per block.

Also, since its launch the crypto has not been hacked while bitcoin is associated and linked to illicit activities.

For the June month, Bitcoin cash fell in price by 26% and last quoted at a price of $495.22.

10. Yearn Finance (YFI):

This is an application based Ethereum token that looks after the Yearn.finance platform. The platform is a yield optimizer that moves funds around the decentralized finance (“defi”) ecosystem for generating a high return. As on July 1 at the time of writing this copy, it is $32,279.

It is an open-source, decentralized finance lending protocol and facilitates users in optimizing their crypto assets via lending and trading services.

This is the second most expensive crypto after Bitcoin with a far lower supply. In few months time the crypto has skyrocketed in value. Its all time high has been $95,071. By the end of 2021, yearn.finance might be traded around the $95,000 mark.

So, it is definitely a buy given the current dip which should be capitalised upon.

For the June month, the crypto fell a staggering 28 percent.

Disclaimer: The story is for informational purpose only and investors should do their own research and consult investment advisors.

GoodReturns.in



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MSME, retail NPAs may rise as relief measures get wound down

Banking & Finance

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The Reserve Bank of India on Thursday cautioned that banks face the prospect of a rise in non-performing loans, particularly in their small and medium enterprises (SME) and retail portfolios, especially as regulatory relief is wound down.

The RBI’s latest Financial Stability Report (FSR) noted that banks remained relatively unscathed by pandemic-induced disruptions, cushioned by regulatory, monetary and fiscal policies.

The report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC-SC) on risks to financial stability.

“Within the domestic financial system, credit flow from banks and capital expenditure of corporates remain muted.

“While banks’ exposures to better rated large borrowers are declining, there are incipient signs of stress in the micro, small and medium enterprises (MSMEs) and retail segments,” the report said.

The FSR underscored that the demand for consumer credit across banks and non-banking financial companies (NBFCs) has dampened, with some deterioration in the risk profile of retail borrowers becoming evident. Subdued credit growth in a low-interest rate scenario could impact banks’ net interest income levels, it warned.

Stable NPA ratios

The gross and net NPA ratios of banks remained stable during the second half of 2020-21, at 7.5 per cent and 2.4 per cent, respectively, in March 2021. As at September-end 2020, the ratios had been 7.5 per cent and 2.1 per cent, respectively.

On the other hand, special mention account (SMA) ratios, which reflect incipient stress, deteriorated, the report said.

The report said banks must prepare contingency strategies to deal with segment-specific asset quality pressures, especially when regulatory reliefs get rolled back.

Per the FSR, macro-stress tests for credit risk show that scheduled commercial banks’ GNPA ratio may increase from 7.48 per cent in March 2021 to 9.80 per cent by March 2022 under the baseline scenario and to 11.22 per cent under a severe stress scenario.

Stress tests also indicate that SCBs have sufficient capital, both at the aggregate and individual level, even in the severe stress scenario.

Monitor MSME, retail loans

As banks and other financial institutions have resilient capital and liquidity buffers, balance-sheet stress remains moderate in spite of the pandemic, the report said. But it emphasised a close monitoring of MSME and retail credit portfolios. This calls for banks to shore up their capital position when favourable market conditions prevail, it added.

“The banking sector will be required to specifically guard against adverse selection bias while being alive to the credit demand from productive and viable sectors.

“In the most optimistic scenario, the impact of the second wave should be contained within the first quarter of the year, while frictional inflation pressures work their way out over the first half of the year,” the FSR said. The report said financial intermediaries need to internalise these expectations into their outlook while staying on guard against potential balance-sheet stress with sufficient capital and liquidity buffers and governance structures.

Govt borrowings

Referring to the surge in the government’s market borrowings, with a significant share of public debt being absorbed by banks, the FSR noted that going forward, however, their absorptive capacity may be circumscribed by the likely expansion of bank credit as economy recovers.

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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India, in consultation with the State Governments/Union Territories (UTs), announces that the quantum of total market borrowings by the State Governments/UTs for the quarter July – September 2021, is expected to be ₹ 1,69,591 crore. The weekly schedule of auctions to be held during the quarter along with the name of States/UTs who have confirmed participation and tentative amounts indicated by them is as under:

Month Proposed Date Expected quantum of borrowing
(in ₹ Cr)		 States/UTs who have confirmed participation and
the tentative amount of borrowing (in ₹ Cr)
July, 2021 July 06, 2021 13400 Andhra Pradesh 2000
Assam 500
Bihar 2000
Goa 100
Gujarat 1000
Maharashtra 2000
Mizoram 100
Punjab 1200
Rajasthan 1000
Tamil Nadu 2000
West Bengal 1500
July 13, 2021 10400 Andhra Pradesh 1000
Bihar 2000
Goa 100
Maharashtra 2000
Punjab 800
Rajasthan 500
Tamil Nadu 1500
Uttarakhand 500
West Bengal 2000
July 19, 2021 7100 Assam 600
Gujarat 1500
Haryana 500
Kerala 1000
Maharashtra 1500
Punjab 500
Tamil Nadu 1500
July 27, 2021 15900 Chhattisgarh 1000
Goa 100
Gujarat 1500
Haryana 2500
Himachal Pradesh 1000
Maharashtra 2000
Punjab 800
Rajasthan 1500
Tamil Nadu 1500
Telangana 1000
Uttarakhand 500
West Bengal 2500
August, 2021 August 03, 2021 18651 Andhra Pradesh 2000
Assam 500
Bihar 2000
Goa 100
Gujarat 1000
Jammu & Kashmir 500
Jharkhand 500
Karnataka 2000
Kerala 1500
Madhya Pradesh 2000
Maharashtra 2000
Manipur 150
Meghalaya 150
Punjab 2000
Rajasthan 1000
Sikkim 251
Tamil Nadu 1000
August 10, 2021 14300 Bihar 2000
Goa 100
Haryana 2000
Kerala 1500
Maharashtra 2000
Punjab 700
Rajasthan 1000
Tamil Nadu 1000
Telangana 2000
West Bengal 2000
August 17, 2021 12250 Assam 600
Chhattisgarh 1000
Gujarat 1500
Karnataka 2000
Kerala 2000
Maharashtra 1500
Nagaland 150
Punjab 500
Tamil Nadu 1000
Uttarakhand 500
West Bengal 1500
August 24, 2021 9700 Assam 600
Goa 100
Haryana 1000
Kerala 1000
Maharashtra 2000
Punjab 500
Tamil Nadu 1000
Telangana 1000
West Bengal 2500
August 31, 2021 13500 Andhra Pradesh 2000
Assam 500
Chhattisgarh 1000
Gujarat 1500
Himachal Pradesh 1000
Madhya Pradesh 2000
Maharashtra 1500
Punjab 1000
Rajasthan 1500
Tamil Nadu 1000
Uttarakhand 500
September, 2021 September 07, 2021 20840 Andhra Pradesh 1000
Arunachal Pradesh 163
Bihar 2000
Goa 200
Gujarat 1000
Haryana 1000
Jammu & Kashmir 600
Jharkhand 500
Karnataka 2000
Kerala 1000
Madhya Pradesh 2000
Maharashtra 2000
Manipur 197
Meghalaya 200
Mizoram 80
Punjab 1500
Rajasthan 1000
Sikkim 400
Tamil Nadu 1000
Telangana 2000
West Bengal 1000
September 14, 2021 12400 Assam 600
Bihar 2000
Goa 100
Karnataka 2000
Maharashtra 2500
Punjab 700
Rajasthan 1000
Tamil Nadu 1000
Uttarakhand 500
West Bengal 2000
September 21, 2021 4650 Gujarat 1000
Maharashtra 2000
Nagaland 150
Punjab 500
Tamil Nadu 1000
September 28, 2021 16500 Assam 600
Chhattisgarh 1000
Goa 100
Gujarat 2000
Haryana 1000
Himachal Pradesh 1000
Madhya Pradesh 2000
Maharashtra 2000
Punjab 800
Rajasthan 1500
Tamil Nadu 1000
Uttarakhand 500
West Bengal 3000
Total 169591  

The actual amount of borrowings and the details of the States/UTs participating would be intimated by way of press releases two/ three days prior to the actual auction day and would depend on the requirement of the State Governments/UTs, approval from the Government of India under Article 293(3) of the Constitution of India and the market conditions. RBI would endeavour to conduct the auctions in a non-disruptive manner, taking into account the market conditions and other relevant factors and distribute the borrowings evenly throughout the quarter. RBI reserves the right to modify the dates and the amount of auction in consultation with State Governments/UTs.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/468

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ULIPs are gaining popularity, says Bajaj Allianz Life study

Banking & Finance

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Unit linked insurance plans (ULIPs) seem to be gaining more popularity amongst investors as stock markets remain bullish. A study by Bajaj Allianz Life Insurance revealed that two out of three Indians intend to invest in ULIPs in the coming year.

It also revealed that the affinity towards ULIPs have increased for nine out of 10 investors, post the first wave of pandemic. “The affinity for ULIP is higher in non-metros at 67 per cent and among mass-affluent Indians (66 per cent) compared to average Indians,” the firm said.

Ease of tracking

For affluent customers, ULIPs are attractive as it offers ease of tracking of investments, low-cost structure and convenience of adding rider or top-up and withdrawal of money, the survey revealed.

Also read: No tax benefit on ULIPs, high PF contribution

Further, middle-income Indians seek the facility of partial withdrawal in ULIPs. “More than one in three middle-income Indians rate this as key feature in ULIPs. For more than 50 per cent mass-affluent Indians, guidance of experts in managing funds is a key feature in ULIPs,” it further said. Amongst the younger investors, SIP was found to be the most preferred mode of investing.

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